How to gain financial-aid expertise

http://www.savingforcollege.com/articles/how_to_gain_financial-aid_expertise_636

Financial Professional Content

Too often high-net worth individuals dismiss financial aid out-of-hand, thinking they have or earn too much to qualify for any assistance. While it’s true that need-based aid is increasingly in short supply, all families should still complete the FAFSA and submit for aid everywhere they can. According to the National Center for Education Statistics, nearly half of applicants in the top 20 percent of earners have qualified for some form of aid, such as preferred federal loans.

To provide the best possible service to your clients asking about financial aid, it is not enough to know just the generalities. Generalities can lead you to the wrong conclusion. You need to understand the details.

There are a few places you can get an overview of the financial aid process, starting right here on Savingforcollege.com. But to really gain a comprehensive understanding requires more in-depth reading.

Your first stop should by the "EFC Formula Guide" published each year by the Department of Education. The guide and accompanying worksheets take you step-by-step through the calculation of any given student’s expected family contribution (EFC). Go through the worksheets a few times with numbers—either real or made up—and you will gain a level of proficiency above and beyond most armchair experts.

You'll need two to four hours to complete this exercise. The EFC formula contains a lot of moving parts, and just figuring out which particular worksheet to use can be challenging. Separate worksheets are provided for dependent students, independent students without dependents other than a spouse, and independent students with dependents other than a spouse. Alternative worksheets are included for students in each of those categories that are eligible for the "Simplified EFC" that excludes assets entirely.

Push through it: The worksheets and accompanying tables are well-organized, logical, and the discussion is clear and helpful.

Once you've "graduated" from this self-study program, you will feel more comfortable in shortcutting the process by using Savingforcollege.com's Financial Aid Calculator, in developing planning suggestions around financial aid and in helping your clients fill out the FAFSA application form.

Originally posted 2014-06-18